3 Stocks to Watch: Aetna Inc., Dell Inc., and Nokia Corp.

              

Aetna Inc. (AET)

On Friday, Aetna Inc. (AET: sentiment, chart, options) reported stronger-than-expected results in its commercial plans serving employers. Aetna projected that this year it would spend less of that business' premiums on medical costs, a measure closely watched by Wall Street. Aetna's fourth-quarter net income fell 15% to $165.9 million, or 38 cents per share, from $194.7 million, or 42 cents per share, a year earlier, when it booked investment losses and various charges. Excluding special items, earnings dropped to 40 cents per share from 96 cents. Analysts, on average, expected earnings of 42 cents per share. Revenue rose about 13% to $8.76 billion.

Options trading was brisk on the shares in response to the earnings report. The stock saw more than 57,200 contracts cross the tape on Friday, which was nearly three times the equity's average daily trading volume. In addition, traders showed a preference for calls, as 65.5% of the volume crossed the tape on the call side.

Furthermore, the International Securities Exchange (ISE) has reported an increase in call trading, as nearly two calls have been purchased to open for every one put purchased to open. This ratio of calls to puts is higher than 56% of all those taken during the past year, pointing to a growing bullish bias.

What's more, the Schaeffer's put/call open interest ratio (SOIR) comes in at 0.60, as call open interest nearly doubles put open interest among options slated to expire in less than three months. This ratio is lower than more than half of the readings taken during the past year, pointing to optimism among short-term options traders.

Technically speaking, the shares of AET are down more than 6% since the start of the year. Since reaching a peak in late December, the equity has steadily dropped under resistance at its 10-day and 20-day moving averages.

Dell Inc. (DELL)

On Friday, a U.S. Court of Appeals reinstated a lawsuit alleging faulty parts in Dell Inc. (DELL: sentiment, chart, options) computers sold about six years ago caused them to power off unexpectedly or prematurely wear down. In May 2008, the suit was dismissed, saying the plaintiffs made unreasonable attempts to delay the case. In a ruling released Friday, U.S. Ninth Circuit Court of Appeals Judge Lyle Strom decided otherwise. "Plaintiffs did not cause any unreasonable delay in the progression of the case," Strom wrote.

In the options pits, traders snatched up contracts on the computer giant on Friday. More than 62,400 contracts crossed the tape, which was more than double the equity's average daily trading volume of 27,974 contracts, according to data from WhatsTrading.com. In addition, 81% of the volume changed hands on the call side.

Calls have been the options of choice on the security recently. The ISE has reported nearly three calls purchased to open for every one put purchased to open during the past two weeks. In addition, this ratio of calls to puts is higher than 65% of all this taken during the past year.

What's more, the ISE/Chicago Board Options Exchange (CBOE) 10-day call/put volume ratio comes in at 4.66, as call volume more than quadruples put volume. This ratio is also higher than 89% of all those taken during the past year.

In addition, the stock's SOIR comes in at 0.59, as call open interest nearly doubles put open interest among options slated to expire in less than three months. This ratio is lower than 80% of all those taken during the past year. In other words, short-term options players have been more optimistically aligned toward the shares only 20% of the time.

From a technical perspective, DELL has stumbled nearly 8% lower since the beginning of 2010. The equity is coming under pressure from its 10-week moving average as it tests former support in the 12.80 to 13 region. The security is also trading below key support at its 10-week and 20-week moving averages – trendlines the stock has not closed a week above since early October.

Nokia Corp. (NOK)

This morning, Nokia Corporation (NOK: sentiment, chart, options) announced that it will cut up to 285 jobs at its plant in Salo, Finland, as part of its plans to focus the factory's production on smartphones for the European market. Furthermore, the plant, which currently employs around 2,200 people, will also introduce new specialized manufacturing methods, Nokia said, adding that it has started employee negotiations regarding the plans.

Ahead of this morning's news, the stock saw some heavy options trading on Friday, with more than 113,000 contracts changing hands. This volume was more than three times the equity's average daily trading volume of 33,557 contracts, according to data from WhatsTrading.com. In addition, 56% of the volume changed hands on the call side.

The ISE has seen more than two calls purchased to open for every one put purchased to open during the past two weeks. This ratio of calls to puts is higher than 64% of all those taken during the past year, pointing to a growing optimism. In addition, the ISE/CBOE 10-day call/put volume ratio comes in at 6.23, which is higher than 87% of all those taken during the past year.

Furthemore, the equity's SOIR comes in at 0.51, which is lower than 90% of all those taken during the past year. In other words, short-term options players have been more optimistically aligned toward the shares only 10% of the time during the past 12 months, pointing to a growing optimism.

On the other hand, Wall Street remains skeptical of the shares. According to Zacks, 23 of the 34 analysts following the stock rate it a "hold" or worse. This configuration leaves ample room for potential upgrades.

Technically speaking, the shares of NOK are up more than 4% since the beginning of the year. However, the security remains locked in a sideways channel between support at the 12 level and resistance at the 16 level. The equity has been trapped in this trading range since December 2008.